Fat cats or in it together? Vice Chancellors’ salaries in the recession – update

Since my initial post last week on this topic, the University of Huddersfield has posted its annual accounts on its website. During the recession, based on comparisons between 2007-8 and 2011-12, the Vice-Chancellor’s salary at Huddersfield rose by 6.2%. This is well below the rate of inflation, and more or less half the average for all VCs in Yorkshire, which now stands at 12.7%.

Another way of looking at senior salaries is to count the number of staff paid £100,000 a year or more (not counting the VC). Across Yorkshire, the number of university staff at this level rose from 242 to 268 people, but at Huddersfield the number of highly-paid staff fell by one person. By contrast, the number at York rose from 11 to 30, probably due mainly to the growth of the medical school (the presence of a medical school always transforms senior university salary levels).

In a future post I will publish comparable figures for Scotland (where several universities have still not published their accounts for 2011-12); I will also update the Yorkshire analysis when I finally see the outstanding set of accounts. 

Meanwhile, this update confirms the general tendency during the recession for most Yorkshire university leaders to enjoy relatively modest salary rises, or even accept a small drop. The exceptions remain the VCs for Leeds Trinity (a rise of 26.7%, but from a relatively low base) and Sheffield (a stonking 36.5%).

Ethics and the new educational governance

Educational governance has changed radically in recent decades. Many of the changes form part of what is sometimes called ‘the new public management’, in which governments try to step away from direct intervention in provision, while setting broad strategic directions which are then monitored through target-setting. This approach is broadly shared by left and right of centre governments, with right-of-centre policy makers tending to favour privatisation, and left-of-centre governments tending to prefer semi-state bodies.

Either way, we end up with an awful lot of quangos and service markets. Actually, I think both concepts are examples of Newspeak. As Rajesh Tandon once said, most quangos are gongos, as they are not ‘quasi-autonomous’ but ‘government-organised non-governmental organisations’. And the markets aren’t really markets, because the state is effectively the consumer of the service, and it also appoints those who manage the serice.

The Student Loans Company is one of these gongos, and it recently let many of its ‘customers’ down. As part of a mass email distribution, it released 8,000 student email addresses. In fairness, I should add that SLC promptly apologised for this ‘administrative error’. So far as I am aware, though, it has not promised to reiew its policy on electronic data storage of personal details. And you won’t need a long memory to recall that David Willetts, the minister for higher education, tore into the SLC less than two years ago for failing to act on two reports, one by Prof Deian Hopkin and one by the NAO, into what Hopkin called the ‘conspicuous failure’ of its chaotic system for dealing with applications.

After the Minister’s intervention, SLC appointed a new chief executive, Ed Lester. Under a deal approved by Danny Alexander and Mr Willetts, Lester originally had himself paid through a company, whose address happened to be at his home. Such arrangements are not uncommon among senior public servants who wish to avoid paying income tax, and in Lester’s case it came to an end only when it was publicised by the Daily Telegraph.

And this is not someone who can plead poverty. According to SLC, Lester’s pay in the period between late May 2010 and the end of March 2011 came to £250,000, including £41,000 in performanc e bonus and an allowance to cover travel costs from his home to his office. His senior team includes a deputy chief executive who was also paid well over £200,000 in 2010-11, and four others paid over £100,000.

Does all of this matter? I think it does, because it tells us something about the new public management, and not just about the characters and values of the men and women who lead the new types of public body. And even if we think morality and virtue are marginal luxuries, surely no one thinks that it is possible over the long term to persuade tax payers that they money should go to people who don’t want to pay taxes?

In principle, I take the view that a large state, directly controlling a wide range of services, is a recipe for bureaucracy and vested interest, and given this view it is no bad thing if we try to find different ways of securing the services that our community needs. But are gongos the answer? And if they are, how can they be led in ways that serve public interests most effectively and sustainably – and even more ethically?